Legal Definitions - dry hole

Definition: A dry hole is an oil or gas well that cannot produce enough minerals to justify the cost of completing it and putting it into production.

Example: A drilling company spends millions of dollars to drill a well in hopes of finding oil or gas. However, after drilling, they find that there is not enough oil or gas in the well to make it profitable. This well is considered a dry hole.

Explanation: The example illustrates the definition of a dry hole by showing how a well that does not produce enough minerals to justify the cost of drilling and production is considered a dry hole. In this case, the drilling company spent a lot of money to drill the well, but it did not yield enough oil or gas to make it profitable. Therefore, it is considered a dry hole.